Full year results presentation 2018 February 14, 2019 · 2020. 7. 25. · Full year results presentation 2018 Page 5 14.02.2019 Schindler + 2 % + 2% + 7 % EI market size (installed

Full year results presentation 2018February 14, 2019

Schindler

Agenda

14.02.2019Full year results presentation 2018 Page 2

Market development

Strategy and execution

Results 2018

Outlook 2019

Schindler

Megatrends remain intactConstantly raising long-term E&E demand


Urban populationis 4.2 bn today and constantly increasing.

By 2030, population in cities will exceed

inhabitants.

Persons aged 60+will increasingly prompt the need for smart solutions to facilitate safe mobility as their population will soon exceed

globally.

Growing middle classwill foster the need for more living space worldwide as it is set to increase by

by 2030.

Sources: United Nations; Euromonitor International; Brookings; World Data Lab

Ageing EI basecreating a huge demand for moderni-zation as the average installation age in developed countries is

years.

Energy efficiencyEnergy efficient solutions are increas-ingly needed as build-ings are responsible for

of global energy consumption.

Digitization and IoTMass connectivity is coming everywhere. The number of things connected to the internet will rapidly grow to more than

by 2030.20

Urbanization and demographic change Ongoing demand for latest technology

40%5.1 bn >60% 1.4 bn 500 bn

Schindler

Global new installations market continued to grow


China

+2% -2%

+1%

NI market size (value) by region

18%

China with slight growth; solid growth in India

Growth in Northern Europe; market contraction in Turkey

Sustained growth in the US; recovery in Brazil from a low base

NI market size (units) by region

18% 64% 100%

2017 | 2018Americas

2017 | 2018EMEA

2017 | 2018Global

2017 | 2018Asia-Pacific

+1%

China slightly up

Schindler14.02.2019Full year results presentation 2018 Page 5

+2%+2% +7%

EI market size (installed base in value) by region

26%

China’s installed base at ~6 million units

Spain, Italy, France and Germany with largest installed base

US with >1 million units in operation

EI market size (installed base in units) by region

34% 40% 100%

+5%

2017 | 2018Americas

2017 | 2018EMEA

2017 | 2018Global


Global existing installations market significantly increasedParticularly in emerging markets

Schindler

Outlook 2019: Several headwinds hindering market growth


China stable at best

Strong growth in India and Southeast Asia

Australia cooling down

Sustained growth in Northern Europe but uncertainty around Brexit a risk factor

Deepening contraction in Turkey

US market stable at high level but market at end of cycle

Continued recovery in Brazil

NI market size (units) by region

2018 | 2019Americas

2018 | 2019EMEA

2018 | 2019Global


Trade tensions have intensified

Emerging market currency risk persists

Tightening global financing conditions

Schindler

Agenda


Market development


Results 2018

Outlook 2019

Schindler

Three strategic targets drive our engagement in all areasCreating an unrivaled user experience


Customer

excellence

User experience

Quality and

innovationDigital Twin

Talent management

Modularity

Quality champions

Digitization

Strategic prioritiesOperational excellence

Grow faster than the market Improve profitability Foster a winning team

Unique productsand services

Selective M&A

Expansion in strategic markets

Efficient processesand structures

Global key accountmanagement

Schindler

Net Promoter Score (NPS) further progressed

Around 130 000 customer surveys conducted in 2018 to assess customer satisfaction

Strong focus placed on resolving challenging customer queries

China Harmonized Platform in full swing

Local presence in India with enlarged manufacturing footprint

US market position improved with Schindler 3300, Schindler 5500, and strong performance in public transport projects

Acquisition of >25 service companies

Participation in VolksliftElevator (China) Co. Ltd. increased to 49%

Customer Excellence Program Selective M&A Expansion in strategic markets

We elevate…


Growth – our top priority

Schindler

One Manhattan West, office building,New York, USA

One Crown Place, office and residential building, London, UK

Commercial and residential Public and infrastructure

New Munch Museum, Oslo, Norway

Beijing Daxing International Airport, Beijing, China

We elevate…Growth – driven by infrastructure and global key accounts

Full year results presentation 2018 Page 10 14.02.2019

Landmark buildings

Estudio Herreros / Kultur- og idrettsbygg Olso KF

Schindler

We elevate…Profitability – continuously improved EBIT


9321’002

1’0831’187

1’269

10.1%10.7%

11.2%11.7% 11.7%

2014 2015 2016 2017 2018

+70+81

+104+82

EBIT before exceptional items, 2014: XJ-Schindler (Xuchang) Elevator Co. Ltd.revaluation gain: CHF 145 million, gain on sale of Mall of Switzerland developmentproject: CHF 82 million, impairment of intangible assets: CHF 21 million; 2016: Gain on sale of operations in Japan: CHF 50 million

EBIT in CHF million

EBIT margin

Schindler

97% response rate Visible performance-driven

culture Above industry benchmarks in

all categories Highest progress on leadership

behaviors

Succession planning Vocational education Training and certification

on all levels Promote diversity and inclusion Schindler Career Development

Program for young talents

Quality leadership along the total Schindler value chain

Guiding principles: Frontloading CollaborAction Continuous improvement

Employee engagement survey

We elevate…


People – a leading employer in the urban mobility industry

Talent management Quality champions program

SchindlerFull year results presentation 2018 Page 13 14.02.2019

We elevate…Innovation – process optimization and increased safety

Schindler CLIMB LiftInnovative installation meets efficient operation

First mover in the construction industry with R.I.S.E (Robotic Installation System for Elevators)

Full digital integration of elevators and escalators in digital building models and planning tools

Breakthrough robotic system for elevators Building Information Management (BIM)

Schindler

We elevate…


Innovation – Schindler R.I.S.E (video)


We elevate…Digitization – enhanced smart urban mobility

>20customer

launch events

>1000sales people

trained

47countries rolled out

with connected Cubes

6 Schindler Ahead

products launchedWe connect passengers every day


Seamless product offering Reduce complexity CompetitivenessProduct offering tailored to market needs and increasing customer value through a seamless portfolio

Less component variants, less effort for design changes, and enhanced quality

New strategic sales approach and higher cost savings for increased profitability

We elevate…Modularity – making things simple!

Harmonized cars and car deco

Elevator systems

Machines

Controller componentsHoistway materials

Doors and door drives

On track to cut product complexity by half: first modular components introduced worldwide in 2018

Tools and processes

2018 2019 2020 – 2021

Schindler

We elevate…


We elevate people We elevate our world

Sustainability – six focus areas and ambitious targets

Schindler

Agenda


Market development


Results 2018

Outlook 2019

Schindler

Global markets in 2018Key developments


Global demand for new installations generated slight growth (in units)‒ China: slightly up but remained highly competitive‒ India: returned to solid growth‒ Europe: continued positive trend (with the exception of Turkey)‒ USA: healthy market continued on a high level

Service and modernization with continued strong growth‒ Growing installed base in emerging markets backed by high conversion rates‒ Increasing modernization opportunities driven by ageing urban portfolio

Schindler

Highlights January – December 2018Global position strengthened‒ Growth across all regions and product lines‒ High proportion of major projects supported by global key account management‒ Accelerated innovation and strategic investments strengthen global position‒ Raw material costs and wage inflation, as well as price pressure hinder margin expansion

Further improvement in results‒ Order intake increased by 6.2% (+6.6% in local currencies)‒ Revenue grew by 6.9% (+7.3% in local currencies)‒ EBIT margin in line with previous year at 11.7%‒ Net profit up by 14.0% (before tax refund +7.2%)


Schindler

Slowdown in economic growth ‒ Increased uncertainties as a result of the trade dispute with the USA‒ Construction sector still impacted by preventative measures against real estate speculation‒ Growth primarily in the residential segment; commercial sector with declining volumes‒ Market remained highly competitive, particularly in major projects

Schindler performance‒ Above-market growth in a challenging new installations market‒ Strong growth in service and modernization‒ Local production infrastructure completed with opening of new escalator step plant

Asia-Pacific: ChinaSlight growth in new installations


Schindler

Overall positive market development‒ Construction sector benefited from urbanization, and investments in infrastructure

and social housing ‒ India: positive macroeconomic environment supported by policies and reforms ‒ Southeast Asia: overall growth, but downward trend in commercial sector continued

Schindler performance‒ Good growth in new installations business, particularly in India‒ Accelerated service and modernization businesses‒ New escalator plant in Pune started production

Asia-Pacific: other marketsStrong growth in India, Southeast Asia with differing trends


Schindler

AmericasGrowth across the region

14.02.2019

Improving conditions in Latin America‒ North America: sustained growth supported by the residential segment and infrastructure‒ Latin America: overall positive demand; Brazil with first signs of recovery

Schindler performance‒ North America: strengthened market position and increased order intake‒ Latin America: overall good growth, also in Brazil‒ Strong performance of existing installations business across the region

Full year results presentation 2018 Page 23

Schindler

EMEAPositive trend continued throughout Europe

14.02.2019

Growth in the North and in the South‒ Northern Europe: solid markets, particularly in the residential segment; challenges

in project execution in some countries‒ Southern Europe: robust growth driven by the residential segment; sharp decline in Turkey

Schindler performance‒ Strong new installations business‒ Solid contribution of installed base, supported by several acquisitions


Schindler

Key figures as of December 31, 2018October – December

14.02.2019

In CHF million Q4 2018 Q4 2017 Δ% Δ% in LC

Order intake 3 016 2 906 3.8 6.0

Revenue 2 940 2 820 4.3 6.5Operating profit (EBIT) 343 327 4.9 8.0in % 11.7 1) 11.6 2)

Financing and investing activities –14 3) –6Profit before taxes 329 321 2.5Income taxes 67 3) 85Net profit 262 236 11.0Net profit before tax refund 257 236 8.9

Earnings per share (in CHF) 2.24 2.02 10.9

Cash flow from operating activities 289 266 8.61) Before restructuring costs (CHF 11 million) 12.0%2) Before restructuring costs (CHF 15 million) 12.1%3) One-time tax refund of CHF 5 million (income taxes CHF 3 million, net interest income CHF 2 million) Full year results presentation 2018 Page 25

Schindler

Key figures as of December 31, 2018January – December

14.02.2019

In CHF million 2018 2017 Δ% Δ% in LC

Order intake 11 669 10 989 6.2 6.6

Revenue 10 879 10 179 6.9 7.3Operating profit (EBIT) 1 269 1 187 6.9 7.5in % 11.7 1) 11.7 2)

Financing and investing activities –17 3) –21Profit before taxes 1 252 1 166 7.4Income taxes 244 3) 282Net profit 1 008 884 14.0Net profit before tax refund 948 884 7.2

Earnings per share (in CHF) 8.79 7.70 14.2

Cash flow from operating activities 1 005 810 24.11) Before restructuring costs (CHF 26 million) 11.9%2) Before restructuring costs (CHF 35 million) 12.0% 3) One-time tax refund of CHF 60 million (income taxes CHF 33 million, net interest income CHF 27 million) Full year results presentation 2018 Page 26

Schindler

Order backlog and revenue by regionRobust order backlog provides solid base for future growth

1) Adjusted for deconsolidation impact of Schindler Japan in 2016 14.02.2019Full year results presentation 2018 Page 27

0%

1%

2%

3%

4%

5%

6%

7%

8%

Asia-Pacific Americas EMEAFY 2017 FY 2018

Revenue growth by region (in LC)

1)

Asia-Pacific 38% 39%Americas 31% 30%EMEA 31% 31%

2018 2017

Order backlog 2018: CHF 8 618 million (+9.7% in LC)2017: CHF 8 106 million

Revenue 2018: CHF 10 879 million (+7.3% in LC)2017: CHF 10 179 million

Asia-Pacific 27% 27%Americas 28% 29%EMEA 45% 44%

2018 2017

Schindler

Dividend proposal of CHF 4.00

14.02.20191) Pay-out ratio in % of earnings per registered share/participation certificate. Full year results presentation 2018 Page 28

Pay-out ratio in %

0.00

1.00

2.00

3.00

4.00

5.00

6.00

2014 2015 2016 2017 2018

Specialdividend

Ordinarydividend

1) 41.4 41.9 70.0 52.0 45.5

In CHF

Schindler

Agenda


Market development


Results 2018

Outlook 2019

Schindler

IFRS 16 – LeasesChanges and impacts


Until end of 2018: Cost for most of the lease contracts have been expensed in other operating expenses

Increase of assets by approximately CHF 400 million

Increase of lease liabilities by approximately CHF 400 million

Increase of operating profit by CHF 5 to 10 million

Increase of financial expenses by CHF 5 to 10 million

Insignificant impact on net profit

Increase of cash flow from operating activities by CHF 100 million

Decrease of cash flow from financing activities by CHF 100 million

Balance sheet Income statement Cash flow statement

Starting from 2019: Lease contracts will be recognized in the balance sheet as a right-of-use asset and related lease liabilityTransition: Schindler applies the modified retrospective approach, no restatement of prior-year figures

Schindler

Long-term growth drivers remain intact

Some key elevator and escalator markets expected to slow down in 2019

Focus on profitable growth unchanged

Revenue growth of between 4% to 6% in local currencies

Net profit guidance for 2019 will be provided with the publication of the half-year results

Outlook 2019Status as of February 14, 2019

14.02.2019

Business environment Schindler guidance for FY 2019


Schindler

2019 2020

Full year results media conference February 14 FebruaryClosing date of shareholders' register March 20Ordinary General Meeting Schindler Holding Ltd. March 26 March 19 First trading date ex-dividend March 28 1)

Date of Schindler Holding Ltd. dividend payment April 1 1)

Publication of selected key figures as of March 31 April 26 AprilPublication of Interim Report as of June 30 August 14 JulyPublication of selected key figures as of September 30 October 24 October

Financial calendar

14.02.2019

Contact: Marco Knuchel, Head Investor Relations; Phone +41 41 445 30 61, [email protected]


The information in the presentation was factually accurate on the date of publication. It remains on our website for historical information purposes only. Schindler assumes no responsibility to update the informationto reflect subsequent developments. Readers should not rely upon the information in this presentation as current or accurate after its publication date.

Copyright © Schindler. All rights reserved

Schindler owns and retains all copyrights and other intellectual property rights in this presentation. It may not be reproduced, modified or copied nor used for any commercial purposes (e.g. manufacturing), nor communicated to any third parties without our written consent.

Schindler undertakes all reasonable efforts to ensure that the information in this presentation is accurate, complete and derives from reliable sources. Schindler however, does not represent nor warrant (either expressly or implicitly) accuracy, reliability, timeliness or completeness of such information. Therefore, Schindler is not liable for any errors, consequence of acts or omissions based on the entirety or part of the information available in this presentation.

1) Subject to approval of a dividend payment by the General Meeting of Schindler Holding Ltd.

mailto:[email protected]

Schindler

Additional charts


Schindler

Balance sheet

14.02.2019

In CHF million 31.12.2018 in % 31.12.2017 in %

Cash and cash equivalents 2 248 22.5 1 709 19.8Other current assets 4 252 42.7 3 771 43.7Total current assets 6 500 65.2 5 480 63.5Non-current assets 3 476 34.8 3 146 36.5Total assets 9 976 100.0 8 626 100.0

Current liabilities 4 744 47.6 4 379 50.8Non-current liabilities 1 489 14.9 979 11.3Total liabilities 6 233 62.5 5 358 62.1Equity 3 743 37.5 3 268 37.9Total liabilities and equity 9 976 100.0 8 626 100.0Net working capital –455 –467Net liquidity 2 231 2 147

Full year results presentation 2018 Page 341) Prepared in accordance with IFRS 15 – Revenue from Contracts with Customers and

IFRS 9 – Financial Instruments as of January 1, 2018. Previous-year figures have not been restated.

1)

Schindler

Quarterly overview 2018/2017

14.02.2019

In CHF million 2018 2017Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1

Order intake 3 016 2 784 3 047 2 822 2 906 2 737 2 739 2 607Revenue 2 940 2 684 2 782 2 473 2 820 2 590 2 509 2 260Operating profit (EBIT) 343 313 332 281 327 302 298 260

in % 11.7 11.7 11.9 11.4 11.6 11.7 11.9 11.5Financing activities –3 –16 24 –9 –9 3 23 –32Investing activities (associates) –11 2 –4 – 3 –2 –7 –Profit before taxes 329 299 352 272 321 303 314 228Income taxes 67 69 44 64 85 74 74 49Net profit 262 230 308 208 236 229 240 179

in % 8.9 8.6 11.1 8.4 8.4 8.8 9.6 7.9

Cash flow from operating activities 289 282 104 330 266 103 85 356Investments in property, plant, and equipment 77 57 65 46 86 54 54 33

1) Prepared in accordance with IFRS 15 – Revenue from Contracts with Customers and IFRS 9 – Financial Instruments as of January 1, 2018. Previous-year figures have not been restated. Full year results presentation 2018 Page 35

1)

Documents

Full year results presentation 2018 February 14, 2019 · 2020. 7. 25. · Full year results presentation 2018 Page 5 14.02.2019 Schindler + 2 % + 2% + 7 % EI market size (installed